MUMBAI (Thomson Financial) - Moody's Investors Service placed under review for possible downgrade the ratings of Kazkommertsbank (KKB) of Kazakhstan, citing concerns regarding KKB's rapid growth over the last few years, as well as the suitability of the bank's business model in light of the recent turbulence in the international capital markets.
The following ratings were placed on watch: 'D' bank financial strength rating; 'Baa2/P-2' global local currency deposit rating and senior unsecured debt foreign currency rating; 'Baa3' foreign currency-backed subordinated debt rating and 'Ba1' foreign currency-backed junior subordinated debt rating.
Moody's has at the same time affirmed KKB's foreign currency deposit ratings at 'Ba1/NP' with a stable outlook.
In Moody's view, the recent market turbulence and consequent liquidity crisis have substantially reduced KKB's capacity to attract market funding, increasing its exposure to refinancing risk and testing its business model. Another negative rating driver is the significant possibility of a material deterioration of the bank's loan portfolio quality due to the rapid growth in lending and the high concentration of construction and real estate exposure, the agency said.
Moodys' believes that some of the bank's borrowers from this sector could be adversely affected by the current credit crunch. TFN.newsdesk@thomson.com jro COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
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